Morgan Stanley raises the target on Nike Inc. (NKE:NYE) to $140

Stock Market Update for March 19th, 2024

Nike Inc Stock Forecast:

According to the predictions of 34 analysts, Nike Inc is expected to have an average target price of USD 121.82 in the next 12 months, and the average analyst rating for the company is Strong Buy. Stock Target Advisor has also analyzed Nike Inc’s stock and has found it to be Slightly Bullish, based on 8 positive signals and 5 negative signals. Currently, Nike Inc’s stock price is USD 117.49, which has decreased by -2.85% over the past week, -3.88% over the past month, and -4.19% over the last year.

Analysts Coverage Change:

Morgan Stanley maintains their “Overweight” rating for Nike Inc. and raises the price target to $140 from $138 on the company’s stock.

Positive Fundamentals:

Nike Inc is a large and stable company with a high market capitalization. Its stock has delivered superior risk-adjusted returns, outperforming its peers in the sector for at least 12 months, and has low volatility, which indicates stability and consistency. The company’s management has also demonstrated superior capital utilization, achieving better returns on equity, invested capital, and assets than its peers, placing it in the top quartile. Additionally, the company has positive cash flow and free cash flow, indicating its ability to generate cash and reinvest it in the business. Overall, these factors make Nike Inc a desirable investment option for investors seeking stability, consistent returns, and positive cash flow.

Negative Fundamentals:

Nike Inc, a leading athletic footwear and apparel company, has faced criticisms in multiple areas related to its financial performance. Firstly, the company’s total returns have been below the median for its peers over the past five years, indicating that it has underperformed in terms of generating returns for its shareholders.

Additionally, Nike Inc is considered to be overpriced compared to its peers based on several key metrics. Its stock price is trading high compared to its earnings, book value, cash flow, and free cash flow basis. Specifically, it is priced above the median for its sector on all of these measures.

Being overpriced compared to its peers may indicate that Nike Inc is not generating enough value to justify its current price, and this could be a concern for investors considering buying the stock. In conclusion, investors should proceed with caution when considering buying Nike Inc stock, given the criticisms regarding the company’s financial performance.

FA Score (Fundamental Analysis):

The fundamental analysis of Nike Inc is “Slightly Bullish” with a FA score of 6.2 out of 10, where 0 is very bearish and 10 is very bullish.

 

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